The prospects of the Indian healthcare electronics industry

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The Indian medical electronics segment faces tremendous demand but inadequate local supply, making it over reliant on imports. For medical electronics equipment to be uniformly available across the country, action is needed on many fronts – government policy, industry participation, and nurturing a startup ecosystem.

By Nijhum Rudra

The healthcare industry is an important sector in India. For the past couple of years, the growth of the medical electronics products, devices and components market in the country has been positive. The inflow of sophisticated medical electronics technology has completely transformed medical practices— ushering in digital diagnostics and medical examinations, and remote delivery of health services by way of telemedicine. According to FICCI, the healthcare sector is expected to register double digit growth due to increased urbanisation, the spread of chronic ailments and a rising elderly population.

According to technology experts, the industry is growing at a very rapid pace, while the infrastructure has also improved across the nation.

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An overview of the Indian medical electronics industry
The economic reforms of the 1990s played a pivotal role in shaping Indian industry. The healthcare industry has also grown considerably, and the current market is estimated to be US$ 50 billion. The medical electronics segment of this industry is growing at a rapid CAGR of 17 per cent, say market researchers in FICCI. India is now one of the largest medical electronics markets in the world, and speculated to reach US$ 25 billion by 2025. Khaleej Times recently mentioned that the healthcare industry in India has become one of the largest sectors of the economy, both in terms of employment and revenue.

As of now, the market for medical devices in India is estimated to be around US$ 10 billion. A Khaleej Times report further added that the Indian medical devices industry comprises over 800 Indian manufacturers, of which close to 65 per cent have a turnover of over US$ 1.5 million, and 2 per cent have a turnover of more than US$ 73 million.

The nation now boasts of exporting its medical devices to more than 150 countries, while the government is also taking several initiatives to boost exports. The Ministry of Commerce and Industry has launched a Brand India Engineering campaign, which is expected to promote the country’s engineering capabilities and boost its image as a manufacturing hub. According to IBEF (India Brand Equity Foundation), India’s hospital industry is speculated to grow at a CAGR of 16-17 per cent to reach Rs 8.6 trillion by FY 2022 compared to the Rs 4 trillion it clocked in FY 2017. To strengthen the sector, India’s government funded medical scheme Ayushman Bharat was launched on September 23, 2018.

The impediments that the Indian medical electronics industry faces
Although the Indian medical electronics industry is growing at a rapid scale, it is still largely dependent on imports from China and other Asian countries. This is one of the major stumbling blocks for the industry, as 75 per cent of the medical electronics equipment market is based on imports. The major barriers for medical electronics startups are insufficient availability of proper laboratories and equipment, and a huge mentorship gap from technology and medical experts. Indian medical electronics startups are still struggling to survive in the market.

A couple of years back, FICCI also stated that about three-quarters of the country’s requirements for medical equipment are being met by imports, a problem that needs to be fixed without any delay. Most high-tech and innovative technologies and products originate from a well-established innovation cycle and a well developed ecosystem. Proper incentives must be given so that this country can develop a manufacturing ecosystem that will ultimately trim down our dependence on imports.

The number of healthcare workers in India for a population of 10,000 in urban areas is 42 and in rural areas is roughly 12. Proper technicians are extremely crucial for daily supervision and operation of medical electronics equipment. The government recently mentioned that, in the coming years, there will be great need for skilled healthcare professionals to service and operate sophisticated medical electronics based solutions.

The overall reach of healthcare in India can be increased by offering affordable healthcare solutions to the end customer, keeping in mind the wide range of income levels in the country. This task can be achieved by the collaborative efforts of various stakeholders working towards developing innovative solutions, which will meet the requirement of every semi-urban and rural area.

Another major challenge in rural and remote areas is the distribution of healthcare equipment and devices, which also makes it difficult for the hospital authorities and doctors to offer timely treatment. In these areas, the use of medical equipment can be improved by designing portable, more affordable and user friendly systems.

Healthcare equipment

Government measures
The famous Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) was launched by the government of India on September 23, 2018, to provide Rs 500,000 health insurance to more than 100 million families per year. The expenditure incurred for this scheme, which is the umbrella for the National Health Protection Mission, will be shared between the Centre and the states in a 60:40 ratio. This ratio will be 90:10 for the north-eastern states and the Himalayan states of J&K, Himachal Pradesh and Uttarakhand; and 60:40 for union territories or UTs with a legislature. The Centre will contribute 100 per cent of the costs to UTs without a legislature.

The government’s initiatives
According to IBEF, the Centre approved the National Medical Commission Bill in December 2017, which aims to ensure medical education reform. The Centre’s Affordable Medicines and Reasonable Implants for Treatment (AMRIT) scheme has also benefited a large number of patients. The Cabinet has also approved the National Nutrition Mission (NNM), a joint effort of the Ministry of Health and Family Welfare (MoHFW) and the Ministry of Women and Child Development (WCD), which uses a holistic approach to break the inter-generational cycle of under nutrition.

According to the official survey report of MeitY, the penetration of medical devices in India is very low; therefore, under the Medical Electronics and Health Informatics Programme, the government is encouraging businesses, R&D institutions and academia to use innovation and new technologies to develop new systems as well as to bring down the costs of healthcare technology, and make it more accessible.

Healthcare equipment

MeitY has sponsored many R&D projects in the area of medical electronics and health informatics. A few of these have already been transferred to potential manufacturers for commercial production. These include the 6MeV linear accelerator (LINAC), the closed loop anesthesia delivery system (CLADS) and the microwave disinfection system for hospital waste. Under the aegis of MeitY, six MeV LINAC machines used for radiation therapy in cancer patients have been installed at the Mahatma Gandhi Institute of Medical Sciences, Wardha (Maharashtra); the Cancer Institute, Adyar, Chennai (Tamil Nadu); the Institute of Head & Neck Oncology, Indore (Madhya Pradesh); and the Amravati Cancer Foundation, Amravati (Maharashtra).

The following are the broad thrust areas identified by MeitY for further development in the medical electronics and health informatics domain:

  • Medical and imaging equipment, including MRI
  • Electronic health records and online courseware in health informatics
  • Decision support systems
  • Infrastructure for training and the maintenance of medical electronics equipment
  • Establishing a Centre of Excellence for R&D in medical electronics
  • Futuristic R&D projects using new/next generation technologies, including for neuroscience
  • Development of assistive technologies and independent living aids

The road ahead
Medical electronics is an extremely important segment within the healthcare industry. Experimentation and innovation, a conducive regulatory framework and a deep focus on technology will attract many investors in the coming years. Dozens of foreign firms have started their manufacturing units in India or have entered the local market by purchasing domestic firms. With the right policies, adequate investments in key technologies and more startups entering the field, India should be able to address the huge gap in the demand for affordable healthcare, particularly in rural areas, in fairly quick time.

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